U.S. Customs Won’t Meet Oct. 1 Pre-Note Target

November 1, 2003

TORONTO, Ont. - Canada's trucking industry is having a mixed reaction to U.S. Customs' failure to meet the Oct. 1 target for issuing the final rule on advance cargo reporting. This, in addition to rep...

November 1, 2003
by
Ingrid Phaneuf

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LOOKING BACK: Lance Lowther's paintings have touched many in the industry. In this painting, Dan Einwechter, president of Challenger Motor Freight is five-years-old and he's with his dad Carson, who died in 1960. A 2000 Volvo, painted in Challenger colours, waits in the background. For more on Lance Lowther's work, see pg. 75.

TORONTO, Ont. – Canada’s trucking industry is having a mixed reaction to U.S. Customs’ failure to meet the Oct. 1 target for issuing the final rule on advance cargo reporting. This, in addition to reports that the target for the new automated commercial environment system has also been pushed back.

Speaking at the National Customs Brokers and Freight Forwarders Association of America’s government affairs conference in Washington in September, Commissioner Robert Bonner said he hopes Customs can present the rules to Congress for review in October and publish the final rules in the Federal Register by the end of October. Since January, Customs has broadcast its intent to have the rule in place by Oct. 1, as spelled out in the Trade Act of 2002, which mandated the government collection of advance manifest information by electronic means for all modes of transportation.

Meanwhile, a U.S. news source reported pilot testing of the ACE (automated commercial environment), much touted by U.S. Customs for its ability to process the electronic reporting required under the new prenotification rule, will also be delayed. According to the report, U.S. Customs’ recently-announced pilot testing for ACE broker and carrier accounts has been pushed back to April 2004 and the pilot for electronic multi-modal manifest will begin in October 2004.

Formal announcements on both are slated to appear in the U.S. Federal Register, according to the report. (At press time, the ACE testing delay remained unconfirmed by U.S. Customs, but appeared to be common knowledge among industry officials.)

“Prenotification does seem to be languishing,” says Graham Cooper, senior vice-president of the Canadian Trucking Alliance.

“As for the delay for the ACE, the position that many in the industry seem to be taking is, ‘Why not introduce the rule and the reporting environment together?'”

To bring in mandatory electronic reporting under the existing fax and paper system first and then to bring in the automated reporting environment later (basically an Internet set up for reporting) just doesn’t make any sense, Cooper points out.

“It would be more efficient to do it all at once,” he says.

Customs and other departments bringing out new regulations to meet Congress’ homeland security putsch may have suddenly discovered they’ve bitten off more than they can chew, Cooper suggests.

“The whole hazmat accreditation process for U.S. drivers is a month late too, and no one from TSA (the Transportation Security Administration) has even communicated with us about when or what requirements will kick in for foreign drivers. I think the departments involved, like Homeland Security and Customs and TSA, are just now starting to realize they can’t put all the pieces together according to their original time line. They underestimated the work load.”

According to Cooper, the delays aren’t necessarily good news for Canada’s cross-border trucking industry.

“The delays are problematic. Carriers are having difficulty making long term plans. And they have no way of knowing when the new rule will kick in. The delays also hurt the credibility of the programs. People adopt a ‘We’ll see if it ever happens attitude.'”

Dan Einwechter, president of Challenger, took a different tack:

“If you think about it, they (the U.S. powers that be) treated us like a yo-yo at times – there’ve been so many regulations coming out all at once and then hurry up and do this…There are those in the industry who would say we’ve become their whipping boy – that the onus and responsibility for security and compliance disproportionately falls on our shoulders.”

As for whether the delays are good news for the Canadian trucking industry as a whole, Einwechter thinks they are.

“As a Canadian, I’d say the delays are a good thing. There are so many companies out there that just aren’t ready. But as the president of Challenger, my attitude towards the new rule is the sooner the better. That’s because we’re ready and it would clearly give us a competitive edge.”

U.S. Customs officials, for their part, refused to set a new deadline for the publication of the prenotification rule.

“It is unknown when the final rule will be issued,” said U.S. Customs press officer Erlinda Byrd. “The Trade Act of 2002 stated that CBP should endeavor to promulgate regulations by October 1, 2003. CBP interpreted the word ‘promulgate’ to mean publish a final rule as a guideline for the agency. The Trade Act of 2002 does not state that it must be published by October 1, 2003.”

As to the why of the delays, Byrd says it’s not because of the volume of submissions regarding the proposed rule.

“This is a large regulation package with numerous offices involved. It was not due to the number of comments submitted,” she said.

According to Byrd, total comments received during the designated time frame (60 days from the July 23 publication of the proposed rule) were 126, with an additional nine presented after the deadline. Canadian interests were received, said Byrd, including the Canadian Trucking Alliance submission recommending the reporting time frames be shortened from the proposed one hour for non-FAST and 30 minutes for FAST shipments to 30 minutes for non-FAST and 15 minutes for FAST shipments.

ACE testing delays were explained thus, by Paula Keicer from U.S. Customs’ public affairs department:

“The Automated Commercial Environment (ACE) program schedule has been modified in part due to the need to integrate increased border security requirements, and to reflect the expanded mission of U.S. Customs and Border Protection. In addition, time was needed to identify and take corrective actions on system performance problems that were found with the initial Secure Data Portal and account management capabilities. The result was a minor schedule change to the third and fourth ‘releases’ of ACE capabilities next year. Accordingly, to align with the adjusted schedule, the Federal Register Notice (FRN) inviting broker and carrier accounts will be published in January 2004. The FRN for the Automated Truck Manifest pilot test will be published in July 2004.”